I just had an idea. How about defining a new Unicode encoding,
named IBM-with-NEL or something like that, in which the byte
value #x85 was considered to be an encoding of the character
U+000A, LINE FEED. Go ahead and register it with IANA.
Then people on mainframes could use their existing text tools,
and as long as they set up their XML parsers properly,
everything would be fine.
Perhaps clutching at straws... -Tim